Breese & Gillet
[2021] FedCFamC1F 30
•20 September 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)Breese & Gillet [2021] FedCFamC1F 30
File number(s): BRC 8313 of 2016 Judgment of: BAUMANN J Date of judgment: 20 September 2021 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – Consideration of whether there ought be a discrete hearing in relation to an issue concerning a third party – Court persuaded little saving in cost and trial time will be achieved in a discrete hearing on the issue. Legislation: Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) r 10.13
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.06
Cases cited: Jones & Dunkel (1959) 101 CLR 298
Karjala & Gallard [2020] FamCA 110
Marley & Ormonde [2020] FamCA 1046
Division: Division 1 First Instance Number of paragraphs: 36 Date of hearing: 13 August 2021 Place: Brisbane Counsel for the Applicant: Mr Tonge Solicitor for the Applicant: Stone Group Lawyers Solicitor for the First Respondent: Mills Oakley Lawyers Second Respondent: Litigant in person (did not participate) Counsel for the Third and Fourth Respondents: Mr Alexander Solicitor for the Third and Fourth Respondents: Richardson Murray Counsel for the Fifth, Sixth and Seventh Respondents: Mr Bunning Solicitor for the Fifth, Sixth and Seventh Respondents: Damien Greer Lawyers Solicitor for the Eighth Respondent: Litigant in person (did not participate) ORDERS
BRC 8313 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1) BETWEEN: MS BREESE
Applicant
AND: MR GILLETT
First Respondent
C Pty Ltd ACN …
Second Respondent
MR MANEN (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
17 SEPTEMBER 2021
THE COURT ORDERS:
1.That the Application by the Sixth Respondent, Ms Callander, for a discrete or separate hearing is dismissed.
2.That the Applications are adjourned for Case Management Hearing before the Honourable Justice Baumann at 2.00pm on 22 October 2021 in the Federal Circuit and Family Court of Australia Division 1 at Brisbane, with all parties and their legal representatives to appear personally.
3.That not less than forty eight (48) hours prior to the Case Management Hearing, each party shall file and serve a Costs Notice in accordance with r 12.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), which not only contains details of the costs incurred since the commencement of these proceedings and the source of payment of those costs, but also the estimated costs of preparing and appearing for a final hearing (including Counsel) on the basis of a five day hearing.
4.That the parties shall confer and seek to reach agreement as to:
(a)any further interim or interlocutory orders sought which the Court is required to determine;
(b)any further expert valuation evidence required or to be updated;
(c)the trial issues arising from the current competing Applications and Responses;
(d)a balance sheet which identifies issues in agreement and issues in dispute;
(e)details of witnesses to be relied upon at the Final Hearing; and
(f)a draft trial plan.
5.That the costs of the parties in respect of the hearing conducted on 13 August 2021 are reserved to the trial.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Breese & Gillett has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODUCTION
Ms Breese (hereafter called “the de facto wife”) and Mr Gillett (hereafter called “the de facto husband) commenced cohabitation in around August 2003 and separated in June 2015.
On 24 August 2016 the de facto wife commenced proceedings for property settlement by way of an Initiating Application seeking 50% of the “net matrimonial pool” and in her Application she joined the entity “C Pty Ltd” as a Second Respondent as a result of the alternate relief sought for a declaration that the Second Respondent held a property at “Suburb T “on trust for the Applicant de facto wife…pursuant to an implied, resulting or constructive trust with the percentage of that interest to be determined”.
The de facto husband, in his Response filed 10 February 2017, opposed the declaration sought and sought, way of cross application, different property settlement orders.
From the first appearance before a Registrar on 15 February 2017 until an appearance before Registrar Walker on 26 February 20121 (four years later), whilst a number of Applications in a Case are apparent (including seeking the appointment of a single expert Mr L to value a number of corporate entities), when the de facto wife filed an amended Initiating Application on 26 March 2021, the proceedings took an entirely different direction. I note that the solicitors retained by the Applicant in 2016 are different from those solicitors who now act for the de facto wife and who, on her behalf, filed the amended Initiating Application.
The relief in the amended Initiating Application sought the joinder of a number of new (allegedly related or interested) parties as Respondents and other relief (see Appendix One to these Reasons). The de facto wife filed a lengthy affidavit in support of the amended Initiating Application.
On 1 April 2021 Senior Registrar Spink made a number of consent orders including that:
(a)the Fifth Respondent be removed as a party;
(b)injunctions restraining, transferring, selling or encumbering respective interests asserted in a property at S Street, Suburb K (“the Suburb K property”);
(c)a general injunction against the de facto husband restraining him from transferring or encumbering “any assets or financial resource in his name”; and
(d)adjourned further applications for interim relief to 3 June 2021.
On 2 June 2021, the Sixth Respondent, Ms Callander, joined issue with the de facto wife as to the “ownership” of a boat named “H”. Ms Callender principally sought a declaration that the de facto wife and de facto husband “have no interest in the boat “H” and in the alternative that the de facto husband “holds all his right, title and interest in the boat “H” on a resulting trust for the Sixth Respondent and the Seventh Respondent”.
Relevantly, in the amended Response the Sixth Respondent sought an order pursuant to then r 10.13 of the Family Law Rules 2004 (Cth) that “there be a separate hearing as to the relief sought by the Applicant in final orders 6, 8 and 10 and in interim orders 1, 2 and 4 of the amended Initiating Application.”
The matter came before me on 2 July 2021, when I was conducting a callover of matters then in a pool of cases awaiting allocation to a trial division judge’s docket for hearing. When I became aware of the application by the Sixth Respondent for a separate or discrete hearing, I adjourned the matter to 13 August 2021 to hear submissions in circumstances where the de facto wife (at least) opposed the separate hearing of the issue of ownership of the boat “H”.
THE PARTIES’ POSITIONS ON 13 AUGUST 2021
The only submissions that are considered at this time are those relating to the application for the discrete hearing.
The Sixth Respondent
Ms Callender was represented at the said hearing by Mr Bunning of Counsel and relied upon his written and oral submissions founded on the affidavits of Ms Callender, Mr Q and Mr R referred to in the submissions.
The Sixth Respondent contended that:
(a)The submissions should be seen as also on behalf of the Seventh Respondent and the Eighth Respondent;
(b)Ms Callender is an “uninterested third party” in the property proceedings only joined some four years after the commencement of the proceedings;
(c)Ms Callender should not have to be put to the expense of attending a final hearing in circumstances where the evidence of the de facto wife “is full of innuendo, speculation and conjecture” and where there is no case against Ms Callender;
(d)The evidence relied upon by Ms Callender (who is the sole director and shareholder of B Pty Ltd – the Seventh Respondent) is that she had a business relationship with the de facto husband; the purchase price for the boat was $1,200,000 and Ms Callender “paid for the entirety of the purchase price”. Ms Callender gives evidence as to how the husband acted as her “buying agent” and why some of the money for the purchase came from the de facto husband’s credit card;
(e)Evidence from Mr Q, Ms Callender’s accountant for 30 years, confirms that since the purchase of the boat in 2016, the vessel has always been included in the balance sheet for B Pty Ltd. The 2020 financial statements have it listed at a depreciated value of $831,561. The evidence of Ms Callender’s solicitor Mr R relates to instructions he received from Ms Callender in July 2018 to register a PPSR security interest over the vessel, and to amend and provide a “Charter – Rental Contract” for the vessel;
(f)Although Counsel’s submissions include contentions in respect of injunctive relief sought by the de facto wife and for a valuation of the boat, those issues were not specifically listed before me for determination on 13 August 2021.
The Third and Fourth Respondents
The Third Respondent Mr Manen and his entity F Pty Ltd were represented by Mr Alexander of Counsel who also produced written submissions. These Respondents were similarly included in the proceedings by the de facto wife’s amended Initiating Application. They have no objection to the application by Ms Callender for her dispute to be dealt with by way of discrete hearing.
However, arising from the Response filed by the Third and Fourth Respondent on 9 August 2021 (four days before the Application by Ms Callender was listed before me), the Third and Fourth Respondents take issue with the application by the de facto husband to set aside, pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”), a mortgage registered on 6 June 2017 between the de facto wife and Mr Manen (see paragraph 2 of the further amended Response filed 23 February 2021). It could not be properly asserted, like Ms Callender, that Mr Manen is an uninterested third party. In his affidavit filed 31 March 2021, Mr Manen says he is the current de facto partner of the Applicant, Ms Ms Breese and they have two young children aged four years and two years.
I explained to Mr Alexander that the hearing on 13 August 2021 did not relate to the application he seeks for a discrete hearing of issues relating to his client’s mortgage. I further note that apart from the mortgage issue, Mr Manen now seeks a declaration that he has an interest in the Suburb K property, I infer, separate from the interest of his current de facto partner, the Applicant.
The First Respondent de facto husband
The First Respondent de facto husband was represented by Ms Moles, as solicitor advocate. He relied upon his affidavit filed 24 February 2021 and written submissions were also filed on 6 August 2021. The de facto husband joins with the position of Ms Callender that a discrete hearing as to the ownership of the boat “H”, be held.
Further submissions were made as to a valuation of the Suburb K property, however on 13 August 2021 the Court did not deal with those submissions – noting again, the issue that had been identified on 2 July 2021 for hearing on 13 August 2021,was Ms Callender’s application for a discrete hearing.
Noting that the de facto husband had no formal response before the Court for determination on 13 August 2021, or more properly, a Reply to the application for a discrete hearing on the mortgage issue (at least) by the Third and Fourth Respondents, the Court did not engage in that issue. Ms Moles made it clear however that the de facto husband opposed a discrete hearing in respect of the mortgage issue. She also contended that the issue in respect of the Suburb K property may also involve the de facto husband’s father, Mr F Gillet, who is the Eighth Respondent.
The de facto wife
The de facto wife was represented by Mr Tonge of Counsel, who relied upon comprehensive written submissions and the numerous affidavits and extensive tender bundle referred to in the document filed on 6 August 2021 and described as the “Applicant’s case outline”.
The fact that in these Reasons I do not refer to every submission raised by the de facto wife, should not be construed as having failed to read and consider that submission. In respect of this application to conduct a discrete hearing, the de facto wife contends as follows:
(a)The competing declarations sought by the de facto wife and Ms Callender relate to assets currently held legally by Ms Callender and her entities in which the wife asserts she and/or the husband have interests in equity. Those assets are a boat called “H” and other business interests which the husband owned at separation;
(b)In December 2015 the de facto husband and Ms Callender signed as co-purchasers to purchase for $1,200,000 the motor vessel. This was post separation, however the de facto wife says the de facto husband and Ms Callender were in a relationship after separation;
(c)A dispute exists as to the source of two significant payments towards the purchase price of “H” of $440,000 (on 17 February 2016) and $200,000 (on 24 February 2016) and the de facto wife disputes the evidence of Ms Callender (supported she says by documents showing International Money Transfers) that the funds originated from Ms Callender;
(d)Paragraphs 19 to 30 of the submissions raise factual issues in dispute – which are clearly triable issues relating to the motor vessel;
(e)At paragraphs 31 to 50, the de facto wife contends about a number of transactions relating to what is described as the “retail business”. The issues raised might well require the de facto husband to call evidence from Ms Callender (so as to possibly avoid any adverse inference under Jones & Dunkel (1959) 101 CLR 298) but even the de facto wife does not assert those businesses still exist. The de facto husband, at the substantive trial, is on notice that, as the de facto wife asserts at paragraph 31 of the written submissions:
A significant issue in the proceedings is what became of the sales businesses established during the relationship and which existed at separation controlled and owned by the husband.
(f)The de facto wife concedes that subpoenaed documents from the Commonwealth Bank of Australia identify that Ms Callender transferred $200,000 to an account held by M Pty Ltd which, although disputed by the de facto wife, Ms Callender asserts was a loan. A dispute arises about the use of stock and the de facto wife’s claim that a shop opened by Ms Callender at P Shopping Centre in early 2019 (some four years after separation) offered stock that had previously been stock of the retail business established during the relationship;
(g)At paragraphs 52 to 54 of the submissions, the de facto wife submits that:
52.In his application for final orders, the husband seeks to have the wife’s home sold (the former matrimonial home) and from the proceeds certain payments made including costs associated with the winding up of the M Trust. In his application, the husband refers to ‘N Business’ and being a trading name of the M Trust. This is a name registered to the D Trust.
53.The foregoing matters relating to H and the online retail businesses are just some examples of trial issues in the determination of the final property settlement entitlements of the husband and wife.
54.Further evidence could reveal that the known dealings between the husband and Ms Callender since separation are also relevant to other issues raised by the wife in her evidence which need to be determined at a trial of the property adjustment dispute.
DISCUSSION
Mr Tonge’s written submissions helpfully identify a number of principles relating to r 10.13 of the Family Law Rules 2004 (Cth), set out in the decision of McClelland DCJ in Marley & Ormonde [2020] FamCA 1046, which I do not repeat but, respectfully, agree with as enunciated by the Deputy Chief Justice.
I also take into consideration the cautionary remarks of Wilson J in Karjala & Gallard [2020] FamCA 110.
The de facto wife submits that there are important issues of credit and complex issues of fact and law in this case involving Ms Callender and the motor vessel, as well as the retail businesses such that it is not appropriate, in the exercise of discretion, to order a separate or discrete hearing.
CONCLUSION
At first blush, there appeared some utility and a chance to narrow issues where the dispute over the ownership of the motor vessel “H” represented an asset that could comprise over 50% of the available and quantified interests or property for alteration between the de facto wife and de facto husband.
However, I am persuaded that the issue of the ownership of the boat is but one of the issues that arise from the asserted business relationship between the de facto husband and Ms Callender. It seems inevitable, in this case, that credit findings in respect of, at least:
(a)the Applicant de facto wife;
(b)the First Respondent de facto husband;
(c)Ms Callender;
(d)Mr Manen, the Applicant’s current de facto partner; and
(e)possibly even Mr F Gillet,
are likely to be necessary.
I hold significant reservations and concerns about the costs these parties are likely to incur in investigating and exploring, through cross-examination, the issues raised in the material already filed, such that costs orders ultimately may not be an appropriate remedy.
It has hardly been to the benefit of the Applicant and the First Respondent that, for reasons not entirely clear to me at this stage, the proceedings have progressed so slowly through the litigation pathway. Even if the Court expert did complete a report some years ago, its relevance now might be questionable – and in that regard it is not before me and I have not read it.
On balance, I have decided to dismiss the application for a separate or discrete hearing about the ownership of the vessel “H” because I am persuaded little saving on costs or trial time will be achieved. Because of the other events said to involve Ms Callender, any necessary credit findings on the separate trial will inevitably mean that I would be unable to hear the balance of the issues.
There are still a number of competing interim and/or interlocutory orders sought (including for injunctions, further discovery, joiner of parties and valuations) to be decided.
I am satisfied that this is a case that requires careful and consistent case management by a Judge to have it listed for trial early in 2022. It seems to me that many of the substantial issues in dispute, apart from the general assertions as to contributions under s 90SM(4)(a), (b) and (c) and relevant s 90SF factors, have already been identified and include:
(a)the parties and/or Mr Manen’s interest in the Suburb K property;
(b)the validity of a mortgage over the Suburb K property in favour of Mr Manen;
(c)the parties and/or Ms Callender’s interest in the motor vessel “H”;
(d)how the de facto husband dealt with the retail businesses in existence at separation and whether his actions, including loans from Ms Callender and/or dealings in the businesses, are matters that should be taken into account. In this respect, the report of Mr L may have concluded with some opinions about the businesses; and
(e)the loans by Mr F Gillet.
I have seen enough of this case since 2 July 2021 to be concerned about the proportionality of costs incurred to date. Whilst I propose to reserve the costs of the parties in respect of the hearing before me on 13 August 2021, I will order that each party shall file and serve a notification of costs incurred to date and the source of payment of those costs, in accordance with r 12.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the new Rules”).
For completeness, I also note that although on 13 August 2021 when I heard this, the appropriate Rule was r 10.13, under the new Rules, the current Rule is s 10.10(1), which is in the same terms save that r 10.10(2) requires an application to be filed.
I am conscious of the number of occasions this matter has been back before the Court. It is in the interests of all parties, who are all at this time legally represented, to confer and identify what further orders are sought to both ensure all necessary parties are joined to these proceedings and all necessary valuations and discovery has been completed.
I have little appetite, considering the proceedings have been on foot for over five years now, where Registrars have made Orders on numerous prior occasions for discovery, to waste more resources on interlocutory steps unless the Court can be satisfied as to the further need to do so.
I will conduct a lengthy (up to two hours) Case Management Hearing at 2.00pm on 22 October 2021 at which time I require (unless COVID-19 restrictions compel otherwise) all legal representatives and parties to attend personally before me.
The directions I make are directed to the discussions I expect to occur and the information to then be provided to the Court before the next Case Management Hearing, are hopefully clear.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Dated: 20 September 2021
SCHEDULE OF PARTIES
BRC 8313 of 2016 Respondents
Fourth Respondent:
F PTY LTD ACN ...
Fifth Respondent:
MS CALLANDER
Sixth Respondent:
B PTY LTD ACN ...
Seventh Respondent:
MR F GILLET
Eighth Respondent:
D TRUST ABN ...
APPENDIX ONE
1.That pursuant to Rule 6.03 of the Family Law Rules 2004 (Cth), Ms Callander, born in 1954 be joined as the Third Respondent in these proceedings.
2.That pursuant to Rule 6.03 of the Family Law Rules 2004 (Cth), the company B Pty Ltd (A.C.N. ...), be joined as the Fourth Respondent in these proceedings.
3.That pursuant to Rule 6.03 of the Family Law Rules 2004 (Cth), the First Respondent’s Father, Mr F Gillet, be joined as the Fifth Respondent in these proceedings.
4That pursuant to Rule 6.03 of the Family Law Rules 2004 (Cth), the company D Trust A.B.N. ... be joined as the Sixth Respondent in these proceedings.
5.Pending further Order of this Court or written consent of the Applicant:
(a)the First Respondent shall be restrained from dealing with selling or further encumbering any asset or financial resource in his name or in which he has an interest in whether in his own right or in which he has a beneficial interest or as a result of the declarations made herein;
(b)The Third Respondent be restrained from dealing with, selling or further encumbering the H boat or her interest in B Pty Ltd or G Pty Ltd;
(c)The Fourth Respondent be restrained from dealing with, selling or further encumbering any asset or financial resource in the name of the Fourth Respondent or in which the Fourth Respondent has an interest;
(d)The Sixth Respondent be restrained from dealing with, selling or further encumbering any any asset or financial resource in the name of the sixth Respondent or in which the Sixth Respondent has an interest.
6.That within fourteen days of the date of this Order, the First Respondent and the Third Respondent (Ms Callander) shall make available, in a neat and well-presented condition the H boat for the purpose of valuation by J Company.
7.The First Respondent shall meet the costs of the valuation of the H boat by J Company.
8.That for the purpose of the final hearing, the value of the property at S Street, Suburb K in the state of Queensland that is owned by the Wife, shall be $900.000.
9.That the Respondent de facto Husband pays the Applicant de facto Wife’s costs of and incidental to this Application.
10.Such further or other Order as this Honourable Court deem meet.
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